Venture capital exits climb to a record $165 billion in 2018

Mumbai: Venture capital-backed exits in 2018 worldwide nearly doubled to a record $165 billion, driven by large exits, including Flipkart’s acquisition by US retail giant Walmart Inc. for $16 billion, shows a report from alternative assets data tracker Preqin. While 2018 saw 1,094 exit deals, 1,307 exits worth $87 billion were recorded in 2017.

Drug-maker Novartis’ acquisition of gene therapy-focused firm AveXis for $8.7 billion and enterprise software major SAP’s $8 billion acquisition of survey and research software company Qualtrics were other major exits of 2018.

North America accounted for the most exits by volume and value by a large margin, with 662 exits worth $88 billion, while China was second by value at $40 billion.

Venture capital investments too had a record 2018, with 14,889 VC deals adding up to $274 billion, a 42% jump from the $192 billion in 2017.

Venture capital investments were driven by Greater China and North America, according to Preqin. North America and Greater China—comprising China, Taiwan, Hong Kong and Macau—accounted for $219 billion, or 79.9%, of funding globally. While North America contributed $113 billion, Greater China contributed $107 billion.

India witnessed 813 VC investments worth $49.4 billion, shows Preqin data.

Nine of the 10 largest deals announced during the year were for Asia-based companies, seven of which were in China. This includes the largest VC deal ever announced: The $14 billion funding of Ant Financial Services Group in June by a clutch of high-profile investors including Singapore’s sovereign wealth fund GIC, Canada Pension Plan Investment Board, Temasek Holdings and private equity giant Warburg Pincus.

“2018 marks another year of record-breaking deal making in the venture capital industry. Asia, in particular, has seen further growth in venture capital-backed activity, seeing activity on pace with that of North America,” said Christopher Elvin, head of private equity, Preqin. “It looks like China and North America will continue to vie for the position of the foremost venture capital deal market in the coming months.”

The year 2018 also saw the largest VC deal ever made in the US with Altria Group Inc. acquiring a significant minority stake in leading e-cigarette firm JUUL Labs for just under $13 billion.

Angel and seed deals made up 35% of all transactions announced during the year, while Series A deals accounted for 28%. Besides, investments in the internet sector accounted for the largest proportion of deal value (29%), while internet and software made up the largest proportions of deals announced at 22% and 23%, respectively. Stage wise, Series C deals saw a spike in average deal value, increasing from $48 million in 2017 to $82 million in 2018.